WBG Response to the Spring Statement 2022

The Chancellor has left women in the lurch: government choices will force people into poverty.

23 March 2022: Speaking in response to the Chancellor’s Spring Statement today, WBG director, Dr Mary-Ann Stephenson said:

“The Chancellor has left women in the lurch. Today, with millions of people being pushed into poverty by low incomes and rising prices, the Government made a political choice to target support at the better off, at the expense of those who need support most. And its women, who have been at the sharp end of these ‘hard choices’ for over a decade – from austerity policies to the Covid response – who will be the hardest hit.

Rishi Sunak’s statement focused on ‘security for hard-working families’, but he offered no real help for the poorest families who are facing a real terms cut to social security. This includes low paid workers, and people who can’t work at all, including the many women who perform unpaid care, pensioners, and disabled people.

The pandemic showed all of us how easy it is to fall on hard times. Any of us could need to rely on social security at any point in our lives, but now if you do find yourself in that position, you’ll struggle to heat your home or feed your children.

Rather than take action to help those hit hardest, the Chancellor focussed on NIC cuts, which will benefit people on low incomes far less than an increase in social security, a cut to fuel duty, which benefits the richest more than the poorest, and the promise of a tax cut in the future which will disproportionately benefit better off men.”

National Insurance Threshold

“The rise in the National Insurance threshold will cost £9.1bn, £0.8bn more than an additional increase to social security benefits. But as our work clearly shows, an increase in social security is better targeted at poorer people, who will find it harder to cope with rising food and fuel prices.”

 “In increasing the NI threshold, the Chancellor appears to have acknowledged that while investment in social care is needed, his decision to fund it through National Insurance contributions was a mistake.”

Fuel Duty Cut

“Cutting fuel duty means a couple of pounds off at the petrol pump. It will, once again, mainly benefit better off men, particularly those with large cars, as they are more likely to take longer car journeys. The Treasury will benefit from higher-than-expected income from fuel duty, as a result of rising prices: a better option would be to invest it in public transport. This would help the environment and keep prices low for those on low incomes, including women, who are more likely to rely on public transport for everyday activities.

Cutting fuel duty is also a decision that flies in the face of the other crisis facing us – the climate emergency. People want to see the Government prioritise the environment, not make it another victim of rising prices. This policy doesn’t help the most vulnerable people and it won’t help the environment either.

There are many more, better targeted policies that the Chancellor could implement to help mitigate the cost-of-living scandal.

We support the widespread call for a windfall tax on energy companies to tax the steep profits resulting from the increase in energy prices, to help support families struggling to pay their energy bills.”

Cut to Income Tax

“Cutting income tax will benefit men more than women, as they earn more. The decisions the Chancellor made today, to promise tax cuts while keeping benefits low, mirrors decisions taken by previous Chancellors under austerity promises that we were told were over. Under austerity successive tax cuts cost £41bn a year by 2020, while social security was cut by £39bn a year by 2020. As with austerity policies, it is women, particularly poor, disabled, and Black and minority ethnic women who will lose out, while better off men gain the most. This is history repeating itself.”

Childcare

“The Chancellor said he wants to help families yet provided no additional support for the childcare sector. Childcare is an essential service and a very large chunk of most household bills. In the ten years to 2022, childcare costs increased at twice the rate of wages – 35.6% compared to 17.8%. It is simply incongruous to encourage families off benefits and into work without any support whatsoever for childcare. Even the 3.1% uprating of benefits doesn’t apply to the childcare element of Universal Credit. Today families received a lot of promises but with very little actual policy to help them.”

-ENDS-

About the Women’s Budget Group

The Women’s Budget Group is an independent network of leading academic researchers, policy experts and campaigners. Our vision is of a caring economy that promotes equality between women and men.

Download our note comparing the benefits of an increase in NI threshold to a 7% uprate to benefits here.

Download our briefing on The Gendered Impact of the Cost-of-Living Crisis here.

Find our pre-Budget briefings here.

For more information or further comment, contact Sarah Ronan, 07399782336, sarah.ronan@wbg.org.uk